Going Concern

The Company’s condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. The Company’s condensed consolidated financial statements do not include any adjustments that might be necessary if it is unable to continue as a going concern.

For the six months ended June 30, 2024, the Company incurred a net loss from continuing operations of $19,658, and as of June 30, 2024, had cash on hand of $6,085 and a working capital deficit of $231,579. The Company’s net loss from continuing operations and working capital deficit have been evaluated by management to determine if the significance of those conditions or events would limit its ability to meet its obligations when due. Management also evaluated the Company’s 2023 Notes (see Note 11), Senior Secured Notes, Delayed Draw Term Notes and 2022 Bridge Notes (see Note 12) (collectively its “current debt”) that are subject to a forbearance period through the earlier of the following: (a) September 30, 2024, as further extended on July 12, 2024 to December 31, 2024 (as further described under the heading Arena Loan Agreement in Note 20); (b) the occurrence of the closing of the Business Combination (as further described in Note 18); or (c) the termination of the Business Combination prior to closing. In addition to the forgoing, management evaluated the August 2, 2024 shut down all of the operations and layoff of substantially all of the employees of Bridge Media Networks, LLC (“Bridge Media”), an affiliated entity of Simplify Inventions, LLC (“Simplify”), and both parties to the Business Combination. Unless the Company is able to refinance or modify the terms of its current debt it runs the risk that its debt could be called, therefore, it may not be able to meet its obligations when due.

In its evaluation, management determined that substantial doubt exists about the Company’s ability to continue as a going concern for a one-year period following the financial statement issuance date. The plans to seek refinancing or modification of the terms of its current debt, complete the Business Combination or enter into possible alternative structures or options to the transactions contemplated under the Business Combination which are discussed below are outside of management’s control.

The Company plans to refinance or modify the terms of its current debt, complete the Business Combination or enter into possible alternative structures or options to the transactions contemplated under the Business Combination based on its continuing discussions with Simplify (as further discussed under the heading Business Combination in Note 20) to alleviate the conditions that raised substantial doubt about its ability to continue as a going concern. However, there can be no assurance that the Company will be able to refinance or modify the terms of its current debt, complete the Business Combination or enter into possible alternative structures or options to the transactions contemplated under the Business Combination.

Recently Adopted Accounting Standards

Recently Adopted Accounting Standards

In June 2022, the Financial Accounting Standards Board (the “FASB”) issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, which clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. This update also clarifies that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction and requires certain disclosures for equity securities subject to contractual sale restrictions. The adoption of ASU 2022-03 on January 1, 2024 did not have a material impact on the Company’s condensed consolidated financial statements.